# 1. A company expects to sell 400 units of Product X in January and then expects sales to increase by 10% per month. If Product X sells

1. A company expects to sell 400 units of Product X in January and then expects sales to increase by 10% per month. If Product X sells for $10 each, the total sales for the first quarter of the year will be$ 2. A manufacturing company expects to sell 12,000 units in August and 15,000 units in September. The company desires to have an ending inventory of 80% of the next month's sales. If inventory on August 1 is 8,000 units, then the company should produce units in August. 3. A manufacturer requires an ending inventory of 5,000 units. Their budgeted unit sales are 20,000 units and beginning finished goods inventor is 3,000 units. The units to be produced is

1. $13,240 2. 16,000 units 3. 22,000 units. Explanation: The question is answered as follows Part 1: Determine the total sales for the first quarter as follows January Sales in Units = 400 Units February Sales Units = 400 x 110% or 1.1= 440 units March Sales Unites = 440 x 110% or 1.1. = 484 units Total Sales = 1,324 x$10 = $13, 240 Part 2: Determine Production In August Production in August making use of the relevant figures = Expected units + (Expected units in september x 80%) - Inventory on August 1 = 12,000 + (0.8 x 15,000) - 8000= 16,000 Units Part 3: Determine the Production Units as follows Sales Units + Closing Inventory of finished goods - The Opening Inventory of finished goods = 20,000 units + 5,000 units - 3000 units = 22,000 units 1. Sales =$13,240

2. 13,600 units

3. 22,000 units

Explanation:

1. The sales are increasing by 10% every month. So,

January Sales in units = 400February Sales in units = 400 * 1.1 = 440 March Sales in units = 440 * 1.1 = 484January Sales = 400 * $10 ⇒$4000February Sales = 440 * $10 ⇒$4400March Sales = 484 * $10 = 4840Total Quarter Sales = 4000 + 4400 + 4840 =$13240

2. The closing inventory for July or opening Inventory for August should have been 80% of August sales,

12000 * 0.8 = 9600 unitsShortfall in Opening Inventory = 9600 - 8000 = 1600 units

The ending inventory for the August should be equal to 80% of September Sales, So

15000 * 0.8 = 12000 unitsSo, August production should be = 1600 + 12000 = 13600 units

3. Let the Units to be Produced be x,

Sales = Opening Inventory + Production - Closing Inventory

20000 = 3000 + x - 5000

20000 + 5000 = 3000 + x

25000 - 3000 = x

22000 = x

$13,240 Explanation: The computation of the sales in first quarter of the year is shown below: = January sales units + January sales units × increased percentage + February sales units × increased percentage = 400 units + 400 units × 1.1 + 440 units × 1.1 units = 400 units + 440 units + 484 units = 1,324 units So, now the sales is = 1,324 units ×$10